REG - Power Metal - FDR Selta Lithium Exploration & Company Update

Power Metal ResourcesAnnouncement

05/12/2022 10:45

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RNS Number : 6052I  Power Metal Resources PLC  05 December 2022

5 December 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

First Development Resources - Selta Lithium Exploration and Company Update

Power Metal Resources PLC (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio
 provides an update to shareholders in respect of lithium focussed fieldwork
at the Selta Project ("Selta" or the "Project"), located in Australia's
Northern Territory. Selta is held through its subsidiary First Development
Resources PLC ("First Development Resources" or "FDR") which is seeking a
planned listing in the London capital markets (Power Metal holds 62.12% of
FDR and 58.59% after transaction outlined below).

HIGHLIGHTS:

Phase II Lithium Focused Exploration Programme

·    Lithium focussed Phase II follow-up fieldwork now underway to further
examine the zonation of a prospective pegmatite system present at FDR's 100%
owned Selta Project. Pegmatites are the target lithology which have the
potential to host lithium mineralisation.

 

·    Approximately 700 potential outcropping pegmatites have been
identified by desktop analysis, within a target area of circa 180km(2) (see
Fig.1 below). Given the size of the prospective area and the number of targets
generated, the planned fieldwork will initially focus on a 30km(2) area in the
southeast of the Project (see Figure 1).

 

·    The Phase II fieldwork follows on from the successful findings of the
Phase I field reconnaissance programme in June 2022, which confirmed the
presence of pegmatite geology over a small area within the south of the
Project, with lithogeochemical analysis of 17 samples suggesting potential for
a zoned pegmatite system originating from the nearby granites (1).

 

·    A desktop analysis of lithium specific publicly available datasets,
satellite imagery and purpose commissioned hyperspectral analysis previously
outlined the presence of potentially pervasive outcropping pegmatites (2, 3)
which are the subject of the current fieldwork campaign.

 

·    Further information in respect of the lithium work programme is
provided below.

Company Update

·    FDR continues to advance preparations for its planned listing and is
very close to completion of all material work streams.

 

·    To further enhance FDR's position in advance of the planned listing
and in light of the positive progress across the exploration programmes at all
projects, the net smelter return ("NSR") royalties retained by the original
vendors of FDR's projects have been purchased by FDR.

 

·    The two NSRs were originally announced on the acquisition of First
Development Resources Pty Limited ("FDR Australia")(RNS: 29.10.2021 (4)) and
URE Metals Pty Ltd ("URE Metals")(RNS: 19.11.2021 (5)) and were each a 2% NSR,
with a 1% buyout right for A$1,000,000. The NSRs were held by the original
shareholders of FDR Australia and URE Metals whose shareholdings were
previously acquired, as outlined in the above dated announcements.

 

·    Each NSR has been purchased for £150,000, payable through the issue
of 1,875,000 new FDR ordinary shares of 1.0p ("New FDR Shares") at an issue
price of 8p per share, for a total consideration of £300,000 through the
issue of 3,750,000 New FDR Shares. The price of 8p per New FDR Share  is
specific to this NSR purchase transaction only and should not be taken as
established pricing in relation to an IPO financing for the planned listing of
FDR in the London capital markets.

 

·    As a result, FDR holds a 100% interest in all projects and there are
now no NSRs over any of its properties.

 

·    Following the issue of the New FDR Shares, the total FDR issued share
capital will amount to 65,894,076 shares of which Power Metal holds 38,605,697
shares representing 58.59% of FDR issued share capital.

 

Tristan Pottas, Chief Executive Officer of First Development Resources
commented:

"Much of the recent focus has been on preparing for FDR's planned UK listing,
however, the team has also remained committed to advancing the project
portfolio for the ongoing benefit of FDR shareholders.

Over the past several months the FDR team has worked hard to develop strong
relationships with the key stakeholders at Selta to facilitate the efficient
deployment of field teams to site to complete value enhancing work.

The technical analysis of the outcropping pegmatites will significantly
improve our understanding of the system present at Selta and will help inform
future work programmes with the intention of identifying zones within the
Project with the potential to host lithium mineralisation."

Paul Johnson, Chief Executive Officer of Power Metal Resources commented:

"The search for economic deposits of lithium continues to be the focus of many
exploration companies globally as they look to capitalise on the strong market
conditions which continue to reflect the lack of supply for the ever-growing
demand for battery metals including lithium.

Importantly, with our readiness for diamond drilling at Wallal and the ongoing
work programme at Selta, we are seeking to ensure FDR is a vibrant exploration
business when listed.

The buyout of all project royalties by FDR was an important step, simplifying
the structure of the planned listing interests and reflecting the value of
FDR's project portfolio which has been significantly enhanced since their
original acquisition."

Figure 1: Selta Project showing lithium pegmatite and rare earth element
prospective areas of interest and target area for current Phase II pegmatite
focussed fieldwork

BACKGROUND - SELTA PROJECT LITHIUM REVIEW

The in-depth review of all publicly available geological, geophysical and
geochemical data for the Selta Project identified multiple uranium and
rare-earth element ("REE") targets within the Selta Project area and
highlighted the potential for lithium, gold and base-metal mineralisation. The
potential for lithium presented an additional opportunity for a mineral
discovery within the Selta Project area, an opportunity which had previously
been unknown. To gain a better understanding of the potential for
lithium-caesium-tantalum ("LCT") type pegmatites, the Company immediately
commenced a lithium review of all publicly available data to help refine
target areas for further investigation and deployed a team to Selta to confirm
the presence of pegmatite geology.

The announcement in respect of this lithium review and subsequent
reconnaissance may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/first-development-resources-company-update/15562865
(https://www.londonstockexchange.com/news-article/POW/first-development-resources-company-update/15562865)

During the reconnaissance the site team was able to confirm the presence of
pegmatite geology and collect samples to determine mineralogy.

The results of the sampling and subsequent geochemical testing of pegmatites
on the property indicated that the pegmatites analysed on the southwest of the
property are part of zoned pegmatite system, most likely originating from the
nearby granite. The initial sampling campaign programme covered only a very
small portion of the property but provided valuable information for future
exploration programmes.

SELTA PEGMATITE SAMPLING PROGRAMME

The mineral deposit model for LCT pegmatites is well defined by the United
States Geological Survey and suggests LCT pegmatites tend to show a regional
mineralogical and geochemical zoning pattern with respect to the inferred
parental granite, with the greatest enrichment in the more distal pegmatites.
FDR's initial analysis of data acquired during the Selta lithium review
supports this model.

FDR now plans to expand on this initial interpretation and conduct further
exploration over a broader area.   Using the data acquired from previous
desktop analysis and reconnaissance, a field team led by FDR's exploration
manager will conduct a targeted pegmatite mapping and sampling programme to
acquire representative geochemical and geological data in the south of the
Selta Project, where previous work has proven the presence of a pegmatite
system.

This work aims to constrain the zonation believed to be present in the
pegmatite system. The field work will include the systematic mapping of the
surface expression of pegmatites along with the collection of representative
rock chip samples, which will then be sent for geochemical analysis. This
field work will feed into FDR's technical understanding of pegmatites at
Selta, to provide targets and inform future work programmes.

QUALIFIED PERSON STATEMENT

The technical information contained in this disclosure has been read and
approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a
qualified geologist and acts as the Qualified Person under the AIM Rules -
Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal
consultant working for Mining Analyst Consulting Ltd which has been retained
by Power Metal Resources PLC to provide technical support.

REFERENCE NOTES

1         Company announcement, First Development Resources - Company
Update,  29 July 2022

(
https://www.londonstockexchange.com/news-article/POW/first-development-resources-company-update/15562865
(https://www.londonstockexchange.com/news-article/POW/first-development-resources-company-update/15562865)
)

2         Company announcement, First Development Resources - Selta
Lithium Update,  13 June 2022

(
https://www.londonstockexchange.com/news-article/POW/first-development-resources-selta-lithium-update/15491241
(https://www.londonstockexchange.com/news-article/POW/first-development-resources-selta-lithium-update/15491241)
)

3         Company announcement, Selta Project - Multiple Target Areas
Identified,  16 March 2022

(
https://www.londonstockexchange.com/news-article/POW/selta-project-multiple-target-areas-identified/15371081
(https://www.londonstockexchange.com/news-article/POW/selta-project-multiple-target-areas-identified/15371081)
)

4         Company announcement, Power Metal Acquires 100% of FDR
Australia,  29 October 2021

(
https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/w04g16x
(https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/w04g16x)
  )

5         Company announcement, Acquisition of Uranium &
Rare-Earth Element Project - Australia,  19 November 2021

(
https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/w1ye76w
(https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/w1ye76w)
)

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

For further information please visit https://www.powermetalresources.com/
(https://www.powermetalresources.com/) or contact:

 Power Metal Resources plc
 Paul Johnson (Chief Executive Officer)                                          +44 (0) 7766 465 617

 SP Angel Corporate Finance (Nomad and Joint Broker)
 Ewan Leggat/Charlie Bouverat                                                    +44 (0) 20 3470 0470

 SI Capital Limited (Joint Broker)
 Nick Emerson                                                                    +44 (0) 1483 413 500

 First Equity Limited (Joint Broker)
 David Cockbill/Jason Robertson                                                  +44 (0) 20 7330 1883

 

NOTES TO EDITORS

Power Metal Resources plc - Background

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration
company which finances and manages global resource projects and is seeking
large scale metal discoveries.

The Company has a principal focus on opportunities offering district scale
potential across a global portfolio including precious, base and strategic
metal exploration in North America, Africa and Australia.

Project interests range from early-stage greenfield exploration to later-stage
prospects currently subject to drill programmes.

Power Metal will develop projects internally or through strategic joint
ventures until a project becomes ready for disposal through outright sale or
separate listing on a recognised stock exchange thereby crystallising the
value generated from our internal exploration and development work.

Value generated through disposals will be deployed internally to drive the
Company's growth or may be returned to shareholders through share buy backs,
dividends or in-specie distributions of assets.

Exploration Work Overview

Power Metal has multiple internal exploration programmes completed or
underway, with results awaited.  The status for each of the Company's
priority exploration projects is outlined in the table below.

 Project            Location  Current  Work Completed or Underway                                                  Results Awaited

                              POW %

 Athabasca Uranium  Canada    100%     Preliminary planning for work in Spring/Summer 2023 is ongoing.             Work programmes for Spring/Summer 2023.
 Molopo Farms       Botswana  87.71%   Diamond drill programme underway. MLEM surveys planned over additional AEM  Drill programme updates and findings from further MLEM survey work.
                                       targets identified.
 Tati Project       Botswana  100%     RC drilling and sampling of mine dumps complete.                            Mine dumps processing and project commercial and exploration next steps.

( )

Exploration work programmes may also be underway within Power Metal investee
companies and planned IPO vehicles where Power Metal has a material interest,
the findings from which will be released on their respective websites, with
simultaneous updates through Power Metal regulatory announcements where
required.  These interests are summarised in the table below:

 Company                          Status/Operations                                                          Link
 First Class Metals PLC           Investment - POW 27.91%                                                    www.firstclassmetalsplc.com (http://www.firstclassmetalsplc.com)

                                  Exploration in the Schreiber-Hemlo region of Ontario, Canada
 Kavango Resources PLC            Investment - POW 9.85%                                                     www.kavangoresources.com (http://www.kavangoresources.com)

                                  Exploration in Botswana
 First Development Resources PLC  Planned IPO - POW 62.12%* (58.59% post NSR buyout)                         www.firstdevelopmentresources.com (http://www.firstdevelopmentresources.com)

                                  Exploration in Western Australia and the Northern Territory of Australia
 Golden Metal Resources PLC       Planned IPO - POW 83.13%                                                   www.goldenmetalresources.com (http://www.goldenmetalresources.com)

                                  Exploration and development in Nevada, USA
 New Ballarat Gold PLC            Planned IPO - POW 49.9%                                                    A new website is currently in development which will be found at

                                                                          www.newballaratgoldcorp.com (http://www.newballaratgoldcorp.com) .
                                  Exploration in the Victoria Goldfields of Australia

                                                                                                             In the interim further information in respect of NBGC can be found at:

                                                                                                             https://www.powermetalresources.com/project/victoria-goldfields/
                                                                                                             (https://www.powermetalresources.com/project/victoria-goldfields/) .

 Uranium Energy Exploration PLC   Planned IPO - POW on listing estimated 50-55%                              www.uraniumenergyexploration.com (http://www.uraniumenergyexploration.com)

                                  Uranium exploration in the Athabasca region of Canada

 

 

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